Digital transformation is increasingly used to modernize public utilities, but its efficiency effects remain insufficiently understood. This study examines the effect of China's 2020 digital transformation policy for state-owned enterprises on the production efficiency of listed electric enterprises. Treating the policy as a quasi-natural experiment, we employ a super-efficiency data envelopment analysis model to measure production efficiency and a difference-in-differences model to examine the policy effect. The results show that the policy significantly improves the production efficiency of state-owned electric enterprises relative to non-state-owned enterprises. Heterogeneity analysis shows stronger effects among utilities in eastern China, labor-intensive firms, and large firms. Mechanism analysis further shows that increased R&D investment is an important channel through which the policy generates efficiency gains, while managerial equity incentives strengthen policy effectiveness. The findings provide policy implications for utility digitalization, differentiated policy support, innovation incentives, and governance reform.
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Cao et al. (2026) studied this question.
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